Loss ratio

Definition : Measures the profitability of a credit insurance policy by comparing the amount of paid premiums with the amount of claims received.
A policy's profitability must not be restricted to the loss ratio, since it is also necessary to take into account the risks avoided through prevention measures. The following calculation is thus preferable :

• Received claims - paid premiums +- variation of bad debts
• This calculation gives an estimation of the actual cost of managing risks with a credit insurance